UPDATE 5-Tropical storm poses hurricane threat to US

(Adds death in Haiti, new position, preparations in Florida)

By Manuel Jimenez

SANTO DOMINGO, Aug 16 (Reuters) - Tropical Storm Fay threatened to become a hurricane as it moved toward Cuba and Florida after drenching Haiti and the Dominican Republic on Saturday and killing at least two people.

The sixth cyclone of what experts predict will be an unusually busy Atlantic hurricane season, Fay was expected to be just short of hurricane strength when it approaches central Cuba on Sunday. But it would likely be at hurricane strength after passing the Florida Keys and starting to curve in toward Florida's west coast on Tuesday, U.S forecasters said.

Areas of the Gulf of Mexico where a quarter of U.S. oil and 15 percent of U.S. natural gas are produced did not appear to be at high risk. Long-range storm forecasts are prone to error, however, and Shell Oil Co (RDSa.L) said it was pulling 200 workers from offshore rigs in the eastern Gulf of Mexico.

Cuba issued a hurricane watch, signaling hurricane conditions could be expected in 36 hours, for a large stretch of central provinces, the U.S. National Hurricane Center said.

It was possible that Fay would clip the communist island twice, once in the southeast near the U.S. naval base at Guantanamo Bay, and again in the center as it begins a turn to the northwest and eventually the north.

The storm system claimed at least two victims in the island of Hispaniola, shared by the Dominican Republic, a major tourist magnet, and impoverished Haiti.

A 34-year-old Dominican woman died and two nephews, aged 13 and 5, were missing after being swept away when flood waters raged through a gully around 86 miles (140 km) east of Santa Domingo and engulfed their truck, the Caribbean country's emergency operations center said.

One man likely died in Haiti after disappearing in a river in Leogane, around 45 miles (75 km) west of Port-au-Prince, Haiti's crowded and ramshackle capital, the head of the civil protection office, Alta Jean-Baptiste, said.

Fay brought rainfall of 4 to 8 inches (10-20 cm) to Hispaniola, with some areas getting up to 15 inches (38 cm), a hazardous amount of rain in Haiti where hillsides have been stripped of trees by people seeking charcoal for cooking.

By 5 p.m. EDT (2100 GMT), Fay had weakened after struggling over the high mountains of Haiti and the storm's top sustained winds had dipped to 40 miles per hour (65 km per hour). But it was located over warm waters, around 60 miles (100 km) south of Guantanamo Bay and was expected to gain strength again.

"Strengthening is forecast during the next couple of days and Fay could be approaching hurricane strength as it nears western Cuba," the Miami-based hurricane center said. A tropical storm becomes a hurricane when its top sustained winds reach 74 mph (119 kph).

CATEGORY 1 HURRICANE

The hurricane center's official forecast predicted the storm's winds would reach 86 mph (14 kph), making it a Category 1 hurricane on the 5-step Saffir-Simpson scale of storm intensity, just before it strikes the southwest Florida coast.

Hurricane Katrina was a monstrous Category 5 hurricane in the Gulf of Mexico in August 2005 before coming ashore as a Category 3 storm and flooding the jazz city of New Orleans in the most costly natural disaster in U.S. history.

The state government of Florida declared an emergency to free up federal funds to deal with the approaching storm and the authorities in the low-lying Florida Keys said they expected to order tourists to evacuate on Sunday morning.

"Residents living in low-lying areas are also likely to be mandated to seek safe shelter. At this time, officials are not likely to order a general resident evacuation," the Monroe County Sheriff's Office said in a statement.

The state's most densely populated areas around Miami and Fort Lauderdale, in the southeast, were not out of the line of fire should the storm steer more to the east than expected.

In addition to the hurricane alert in Cuba, tropical storm warnings and watches were in effect for parts of Haiti, the central Bahamas, the Cayman Islands and Jamaica. (Writing by Michael Christie; Additional reporting by Erwin Seba; Editing by Cynthia Osterman)